How Credit Card Payoff Time Is Calculated
Unlike a fixed-term loan, a credit card balance shrinks based on whatever payment you choose to make each month. Given a fixed monthly payment, the number of months to pay off the balance is calculated using:
Months = −log(1 − (r × B) ÷ P) ÷ log(1 + r)
Where r is your monthly interest rate (APR ÷ 12), B is your current balance, and P is your fixed monthly payment.
Why Your Payment Must Exceed the Monthly Interest
If your monthly payment is less than or equal to the interest charged that month, your balance will never decrease — it will grow indefinitely. This calculator requires a payment amount above this minimum threshold to compute a valid payoff timeline.
Why Credit Card Debt Is So Costly
Credit cards typically carry much higher interest rates than mortgages, auto loans, or even most personal loans — often 18-29% APR — which means even a moderate balance can accumulate substantial interest if only minimum payments are made. Paying more than the minimum each month dramatically reduces both the payoff time and total interest paid.